Digital Transformation: How digital factories have changed the industrial landscape

Many organisations talk about how digital transformation can improve operations and generate new business, however, the path from strategy to reality can be challenging and risky. In this article we explore how digital transformation can bring new levels of innovation to factories and other heavy industries, and review some best practices for executing on a strategy.

Digital meets heavy asset industries

When people think of digital it is most often about apps and online experiences, but traditional heavy industries such as manufacturing, utilities and transport can also benefit hugely from digital transformation.

Suez Australia and New Zealand Director, Marketing, Communications and National Key Accounts, Justin Frank, says digital transformation can play a role in changing traditional fixed asset industries, by integrating new technology into existing equipment and processes.

“If you look at the resource recovery and water industries, digital transformation puts more information in the hands of both our council and commercial customers,” he says. “Our new trucks can be fitted with our SUEZ Core technology featuring a series of on-board and street view cameras that are integrated with the council’s customer service IT systems. They become a platform in themselves upon which further innovation can be added”.

With the right digital platforms, citizens can report problems that are then automatically submitted to customer service, increasing efficiency.

Going digital with heavy assets also helps with meeting compliance requirements. For example, weighing technology allows operators to detect when trucks are full. This helps schedule deliveries into fixed assets, such as recycling plants.

“By integrating operational technology into IT systems heavy industries can streamline the flow of resources and improve the customer experience,” Frank says.

In the case of water treatment and delivery, smarter networks with sensors can identify leaks, leading to faster resolutions. Suez partners with Sydney Water to operate the Water Treatment Plant at Prospect, NSW, which supplies more than 80% of Sydney’s drinking water. In this case, real-time operations information must be readily available for staff.

More sensors will facilitate options for network-based control systems and ultimately “smart cities” where public infrastructure, such as street lights, can be optimised for greater efficiency.

“Developing smart cities is about the ability to control infrastructure by coordinating streams of data into a single source of truth and, in Australia, we are starting to build a pipeline of opportunities,” Frank says.

“In Dijon, France, smart LED lighting will reduce lighting costs by 65%. The light itself can also accommodate other digital solutions such as air quality monitors and weather sensors.”

Smart factories of the future will consist of a mix of existing equipment, digital technology and new, greenfield sites where the operations have digital integrated in the design.

There is a huge need for smart factories in the Australian resource recovery industry as we need to catch up with our European counterparts, according to Frank.

“There are mountains of glass waste around the country because there is little demand for the recycled product due to cheaper imports, however, at Suez, we grind thousands of tonnes of glass a year for use in infrastructure projects such as pipe bedding and road base,” he says. “Smart factories will reduce labour costs helping Australian manufacturing become more competitive and therefore create more demand for recycled products in the production process.”

Thales Director of Strategic Initiatives, Josh Polette, says the fundamental aspect of digital transformation is data and that allows you to make informed decisions.

“Data is digital gold - all factories have data in some form or another. So take advantage of what the organisation does have and leverage it to make better decisions,” he says.

“Smart factories will enable better decision making more quickly, and they will ensure operating information is digital from the outset. When it comes to mass production Australia needs to focus on advanced manufacturing where we are applying our smarts to making products which require high-end engineering and manufacturing.”

Thales operates advanced manufacturing facilities across a diverse range of industrial activities. In particular, Thales’ Vehicle Centre of Excellency in Bendigo, Victoria, is where one of the major products, the Hawkei, a protected mobility vehicle for the Australian Defence Force, is produced. The factory is taking a digital approach to designing, and developing the vehicle – from software-driven engineering work to using robotics on the production line.

The Hawkei computer system sits in the vehicle and integrates a number of different information sources into a single system and interface.

The opportunities for digital in heavy industries are clear, and many strategies promote the benefits of transformation programs, but executing on the promise can be a significant challenge for many organisations.

A sound starting point is to collaborate with stakeholders (internal or external) to understand what the needs are.

“The Dijon case study takes a consortium approach,” Frank says. “Each player brings something to the table in order to meet more of our customer’s needs and clear roles and responsibilities make execution of the project more manageable.”

Successful execution also involves quick wins and an understanding of sequencing.

“Don’t do steps that are three or four steps ahead of what you need to achieve now,” he says. “If you start without understanding customer needs you will come to roadblocks. And you must be open and transparent as to whether your capabilities meet your needs.”

At Thales, Polette says key strategies for executing on a digital transformation program involve focusing on identifying real pain points or opportunities within the organisation.

“Do not try and do everything at once – that is a recipe for failure. Focus on key outcomes and go through a process to identify the ones you will get the best return on, including a better product or service for customers,” he says.

By focusing on a small number of outcomes you should begin to see visible improvements in a small, three- to four-month timeframe.

Another ingredient for successfully executing on a digital transformation strategy is change management with people.

“In reality digital transformation is about the transformation of an organisation and using digital to accelerate that,” according to Polette. “It is important to ensure that the ideas, problems, pain points and opportunities coming from the shop floor are analysed, in addition to the market trends. Getting buy-in and ownership from people is imperative.”

In addition to people, Frank says executing on digital initiatives is more successful when the data access is not set up to be proprietary. Open data access can be built upon by third-parties creating opportunities for further improvement, innovation and to attract start-ups with fresh ideas.

Learn more about how digital transformation can increase business performance at at the French-Australian Chamber of Commerce's upcoming 2018 Schneider Electric Innovation Hub Business Forum hosted in Adelaide on June 15 and Sydney on June 18: https://www.faccibusinessforum.com.au/

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